Harvey v. Harvey

• Decision Date: 23 June 1930
• Citation: 231 N.W. 580,202 Wis. 553
• Parties: HARVEY v. HARVEY ET AL.
• Court: Wisconsin Supreme Court

202 Wis. 553

231 N.W. 580

HARVEY

v.HARVEY ET AL.

Supreme Court of Wisconsin.

June 23, 1930.

Appeal from a judgment and an order of the Circuit Court for Milwaukee County; Edward T. Fairchild, Judge.

Action by Percy D. Harvey, as executor of the will of Frances A. Harvey, deceased, against Albert J. Harvey and others. Judgment for plaintiff, and defendants appeal from the judgment and from an order denying a motion for new trial.--[By Editorial Staff.]

Affirmed.

Action begun November 15, 1927; judgment entered May 18, 1929, order dated November 27, 1929. Action in equity to require the defendant Albert J. Harvey to convey certain stock to the plaintiff. Frances A. Harvey was the mother of the defendant Albert J. Harvey. She died in the city of Cleveland on September 28, 1927, leaving a last will and testament wherein she left all of her property of every nature and description to her daughter Ethel Neville, and appointed as executors the plaintiff, Percy D. Harvey, and Claude H. Neville, husband of Ethel. The will was duly admitted to probate in the probate court of Cuyahoga county, Ohio, and the executors qualified. On behalf of the plaintiff it is claimed that, at the time of her death, Frances A. Harvey was the owner of 1975 shares of the first preferred stock, 350 shares of the second preferred stock and 730 shares of the common stock of the Plankinton Building Properties, Inc., formerly called the Plankinton Arcade Company, a Wisconsin corporation, doing business in the city of Milwaukee; that such stock had been transferred to her by the defendant A. J. Harvey for a valuable consideration; that said shares of stock had been wrongfully and fraudulently converted by the defendants, A. J. Harvey, Clara V. Harvey, his wife, and Richard D. Harvey, Albert J. Harvey, Jr., and Frank E. Harvey, their sons.

The amended answer of the defendants denies all of the charges of conspiracy and wrongdoing contained in the complaint, and alleges that the 1975 shares of first preferred stock never were the property of Mrs. Frances Harvey; that the 350 shares of second preferred stock and 730 shares of common stock were given by Mrs. Frances Harvey to her three grandsons above named in September, 1926, about a year prior to her death.

There was a long trial upon the issues made by the pleadings, the investigation took a wide scope, and at the close of the trial the court found in favor of the plaintiffs. Judgment was entered requiring the shares of stock in controversy to be reissued to the plaintiff as the executor of the last will and testament of Frances A. Harvey. From that judgment the defendants appeal.

Bloodgood, Stebbins & Bloodgood and Bloodgood, Kemper & Passmore, all of Milwaukee (Albert K. Stebbins and Jackson B. Kemper, both of Milwaukee, of Counsel), for appellants.

Walter H. Bender, of Milwaukee, for respondent.

ROSENBERRY, C. J.

The record in this case is very voluminous. The printed case contains over 600 pages, and there are approximately 175 pages in briefs of counsel. We make this statement, not as forming a basis for any criticism in the preparation and submission of this case to this court, but to indicate that the record is not only an extended one, but the facts as disclosed by it are complicated and intricate. Upon the argument it was advisedly conceded that there was sufficient evidence in the record to sustain the finding of the trial court. It is equally apparent that the findings sustain the judgment.

[1][2] The principal claim of the defendants upon this appeal is that it appears from the uncontradicted testimony that the deceased Frances A. Harvey obtained the stock in question as a part of a scheme to hinder, delay, and defraud creditors of A. J. Harvey; further, that it appears without contradiction that none of the stock was in Mrs. Harvey's possession at the time of her decease, but was in the possession under color of title at least of the defendants; that such being the case, the plaintiff cannot recover back the stock as the representative of Mrs. Harvey. The difficulty with this position is that the findings of the trial court are to the contrary. The trial court finds that the certificates delivered by Albert J. Harvey to his wife, Clara V. Harvey, and his mother, the deceased Frances A. Harvey, were pursuant to and in fulfillment of a trust arrangement theretofore entered into by Albert J. Harvey with his wife and mother. If they were delivered pursuant to a prior trust arrangement they could not have been delivered as part of a fraudulent scheme to defeat the claims of the creditors of Albert J. Harvey. While it is true that a conveyance made by a debtor as part of a scheme to delay or defraud his creditors is void as to creditors, it is valid at least in the sense that it is operative between the parties and as to all persons other than creditors. Jandl v. Guziekiewicz, 195 Wis. 258, 218 N. W. 593;Fargo v. Ladd, 6 Wis. 106.

[3][4] While it is held in Fargo v. Ladd that, where the fraudulent grantee reconveys the property to the grantor, or disposes of it in accordance with the directions of the grantor, he cannot afterward set up a valid claim to the property or the proceeds thereof, in which he asserts as the basis of his title the original fraudulent conveyance; it is quite evident from the authority cited to sustain the proposition laid down in that case that the reconveyance must be pursuant to an understanding which is a part of, or connected with, the original fraudulent scheme. In this case there was no such arrangement or understanding. Frances A. Harvey by the transfer acquired full legal title to the property even if the transfer was fraudulent as to creditors. Both Albert J. Harvey and Frances A. Harvey denied that there was any fraudulent scheme, or that the transfer was made in an effort to defeat or defraud the creditors of Albert J. Harvey. It appears that Albert J. Harvey requested his mother to loan him the certificates so that they might be used as collateral security. This was not a reconveyance made in fulfillment of an understanding had at the time of the transfer, but is an independent transaction and must stand upon its own basis, disconnected from any fraudulent transfer, if there was fraud in the original transaction. So that upon any possible theory of the case this claim of the appealing defendants must fail.

We have given the record that thorough full consideration to which the importance of the case and the amount of material involved requires and demands in response to the claim of the appealing defendants, that the result reached is so unjust, inequitable, and unfair as to require a reversal of the judgment in the exercise of the power of discretionary reversal conferred upon this court by section 251.09, Stats. In this view we are unable to concur, although we have given to the arguments of counsel careful and considerate attention.

[5][6] On the part of the defendants it is most vigorously contended that the court should reverse the judgment on account of the alleged misconduct of Joseph A. Barly, Esq., a member of the Milwaukee bar, the attorney for the plaintiff in this action, who was the attorney for the defendants A. J. Harvey and Plankinton Building Properties, Inc., in the years 1924, 1925, and 1926.

In the year 1922 an action was begun against A. J. Harvey by the courts of the state of New York, in which damages were claimed in the sum of $2,900,000 for breach of contract. Between September 23, 1924, and April, 1925, A. J. Harvey transferred substantially his entire interest in the stock of the various classes of the Plankinton Building Properties, Inc., In the fall of 1925 judgment was rendered against A. J. Harvey in the courts of the state of New York for a sum in excess of $720,000. Actions...